No matter how good an employee is, if he repeatedly breaks company rules by missing work, ignoring policies or refusing to file paperwork, he can damage your company. Some companies respond to disciplinary issues by using disciplinary layoffs -- temporary, unpaid suspensions from work. While this strategy can be highly effective and allows you to punish an employee without permanently terminating him, it also poses some risks and can require quite a bit of paperwork.

Losing the Employee

If your employee finds another job during his suspension, he might choose to take that position rather than waiting to come back to your company. This means that you'll go through the hassle of instituting a disciplinary layoff -- including any associated costs -- and then be stuck having to recruit and train a new employee. This can be costly and time-consuming.

Paperwork and Procedure

To institute a disciplinary layoff, you'll likely have to follow a specific procedure, depending upon your company's policies and the terms of your employee's contract. This might include warning the employee or other forms of progressive discipline prior to laying him off. You'll also likely have to document the specific reasons for the layoff, and when the employee returns, complete even more paperwork addressing how the employee can improve his job performance.

Increased Workload

Unless you hire a temporary worker to replace your employee -- which can be expensive and time-consuming in itself -- you or your employees will likely have to work harder while your employee is suspended. This could mean longer hours with more overtime pay, or could simply lead to more job stress. If your employees aren't able to pick up the slack, you could lose business or fall behind on company goals.


Lawsuits are the most severe risk of disciplinary layoffs. Even when an employee is not permanently terminated, he can still institute legal action against your company. Most states have at-will employment, which means you can terminate an employee for any reason, so long as he doesn't have a contract and the termination doesn't break the law. However, if your employee has a contract, failure to follow it to the letter can give rise to legal action. If your employee can allege that the termination was due to discrimination, was part of a pattern of harassment or was because he reported the company for engaging in illegal behavior, he can sue you.